Since this site has a siter site, you can read more about
that subject there.
If you wan’t to dig even further into this subject, we can recommend “Security Analysis” by Benjamin
Graham and David Dodd:
- The Classic 1934 edition chapter IV page 50.
- The Classic 1940 second edition chapter IV page 57.
That whole chapter has the same title as the heading of this story. Since there is nothing new under the sun, a side from bots or software that trade the market today, we recommend another classic book, “Reminiscences of a Stock Operator” by Edwin Lefèvre for the beginning or seasoned trader. Trading is
spculation according to Graham and Dodd and we agree. Even if you think a stock is undervalued and you invest for the purpose of a price increase, it is speculation in our view. You buy the stock and bet on a price increase. If you use advanced technical analysis, software or mathematical models in your investment
we can say the same. If you buy a share in a company to become an owner for the purpose of dividends, you are an investor according to our definition. That means that companies that have a historical tradition for paying out (good) dividends are god investment candidates.